You Be the Judge

Injured Worker Wins Settlement From Employer

A judge ruled an employer erred when it terminated an injured worker's benefits because he failed to report proceeds from the sale of a horse.
By: | March 10, 2017 • 3 min read

An employee of A.W. Chesterton suffered a work-related accident while picking up a box of parts. The worker received workers’ compensation benefits, and he was required to fill out monthly questionnaires regarding his income from any business enterprise. The worker indicated that he did not receive any income.

The worker sold a horse for $3,500, and he did not indicate that he earned income on the forms. Chesterton terminated the worker’s benefits, claiming that the sale was part of a business enterprise and that the worker committed fraud when he denied being a part of any business on his forms.

Advertisement




The worker explained that he had owned horses as a hobby since he was five years old, and he was 76 at the time of trial. He said that he owned as many as 42 horses but decreased that number to seven after his accident.

Chesterton was aware that the worker raised horses while he was employed and after the accident. The worker admitted that he sold a horse but stated that it was part of his hobby of raising horses rather than any business venture. He testified that the horse he sold for $3,500 was purchased for $20,000 19 years before. He stated that prior to that sale, he last sold a horse four years before.

The workers’ compensation judge found that Chesterton failed to carry its burden of proof to establish fraud and awarded the worker supplemental earnings benefits, penalties, and attorney’s fees. Chesterton appealed.

Did the WCJ err when it determined that the employer failed to establish fraud?

  • A. No. The worker did not willfully make false statements for the purpose of obtaining workers’ compensation benefits.
  • B. Yes. The worker was involved in raising and selling horses as a business enterprise.
  • C. Yes. The worker engaged in physical labor while raising horses.

How the Court Ruled

B is incorrect. The court found that the worker was involved in raising horses as a hobby and that the sale of the horse was a sale of a personal asset. Chesterton’s adjustor admitted that had the worker sold personal property at a garage sale, those proceeds would not be material to his workers’ compensation claim.

Advertisement




C is incorrect. The worker explained that any physical work done such as cleaning stalls and feeding the animals was done out of his desire to have horses as a hobby rather than a means of income.

A is correct. In Johnson v. A.W. Chesterton, et al., No. 16-807 (La. Ct. App. 02/01/17), the Louisiana Court of Appeal held that the worker did not commit fraud when he failed to note the proceeds from the sale of the horse on his forms dealing with income from any business enterprise.

The court stated that the WCJ’s reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed unless manifestly erroneous.

Advertisement




Here, there was no manifest error in the WCJ’s findings that the worker did not willfully make false statements for the purpose of obtaining workers’ compensation benefits.

The court also found that the WCJ properly awarded penalties and attorney’s fees. The court awarded the worker additional attorney’s fees for work performed on appeal.

Editor’s note: This feature is not intended as instructional material or to replace legal advice.

Christina Lumbreras is a Legal Editor for Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

2017 RIMS

Cyber Threat Will Get More Difficult

Companies should focus on response, resiliency and recovery when it comes to cyber risks.
By: | April 19, 2017 • 2 min read
Topics: Cyber Risks | RIMS

“The sky is not falling” when it comes to cyber security, but the threat is a growing challenge for companies.

“I am not a cyber apocalyptic kind of guy,” said Gen. Michael Hayden, former head of the Central Intelligence Agency and National Security Agency, who currently is a principal at the Chertoff Group, a security consultancy.

Gen. Michael Hayden, former head of the CIA and NSA, and principal, The Chertoff Group

“There are lots of things to worry about in the cyber domain and you don’t have to be apocalyptic to be concerned,” said Hayden prior to his presentation at a Global Risk Forum sponsored by Lockton on Sunday afternoon on the geopolitical threats facing the United States.

“We have only begun to consider the threat as it currently exists in the cyber domain.”

Hayden said cyber risk is equal to the threat times your vulnerability to the threat, times the consequences of a successful attack.

At present, companies are focusing on the vulnerability aspect, and responding by building “high walls and deep moats” to keep attackers out, he said. If you do that successfully, it will prevent 80 percent of the attackers.

“It’s all about making yourself a tougher target than the next like target,” he said.

But that still leaves 20 percent vulnerability, so companies need to focus on the consequences: It’s about response, resiliency and recovery, he said.

The range of attackers is vast, including nations that have used cyber attacks to disrupt Sony (the North Koreans angry about a movie), the Sands Casino (Iranians angry about the owner’s comments about their country), and U.S. banks (Iranians seeking to disrupt iconic U.S. institutions after the Stuxnet attack on their nuclear program), he said.

“You don’t have to offend anybody to be a target,” he said. “It may be enough to be iconic.”

The world order that has existed for the past 75 years “is melting away” and the world is less stable.

And no matter how much private companies do, it may not be enough.

“The big questions in cyber now are law and policy,” Hayden said. “We have not yet decided as a people what we want or will allow our government to do to keep us safe in the cyber domain.”

The U.S. government defends the country’s land, sea and air, but when it comes to cyber, defenses have been mostly left to private enterprises, he said.

“I don’t know that we have quite decided the balance between the government’s role and the private sector’s role,” he said.

As for the government’s role in the geopolitical challenges facing it, Hayden said he has seen times that were more dangerous, but never more complicated.

The world order that has existed for the past 75 years “is melting away” and the world is less stable, he said.

Nations such as North Korea, Iran, Russia and Pakistan are “ambitious, brittle and nuclear.” The Islamic world is in a clash between secular and religious governance, and China, which he said is “competitive and occasionally confrontational” is facing its own demographic and economic challenges.

“It’s going to be a tough century,” Hayden said.

Anne Freedman is managing editor of Risk & Insurance. She can be reached at [email protected]